Purchasing an investment property in the Sunshine State can be a worthwhile and rewarding experience. But like other business ventures, you must know where to invest your money to get the maximum return on investment for your short-term or long-term investment properties.
The Florida real estate market is one of the most profitable in the U.S., despite the high prices and demand for properties. This article will explore the best real estate markets in Florida for different types of investors and investment properties.
The best Florida investment property locations include:
- Miami: Best for long-term and short-term rentals
- Orlando Metro: Best for traditional investors
- Clearwater: Best for Airbnb properties
- Fort Lauderdale: Best for projected appreciation
- Jacksonville: Best for investors on a budget
- Tampa: Best for first-time investors
- Orlando Sub Markets: Best for fix-and-flip investors
- Regions of Tampa: Best for multifamily investors
Miami: Best for Long-term and Short-term Rentals
Miami isn’t just known for its pristine beaches and warm weather, but also its booming housing market. The area has exceptionally high tourism numbers, which drives higher demand for rental properties and daily rates. In fact, the Greater Miami Convention and Visitors Bureau found that 24.2 million people visited Miami in 2019.
Because of the influx of tourists, the Miami market is excellent for short-term and long-term rental properties. Property investors can expect to find affordable rental properties, with the average home value at $531,706. Home values have increased by over 28.6% in the past year.
There are also additional benefits to purchasing investment properties in the Miami area. Miami has relaxed rental laws, with the price set by the market rather than the government. This ensures that those planning to rent their properties can get a real return on investment. It’s also landlord-friendly. Evictions are easier to process, and there is a 7-day unconditional eviction process for repeat non-payers.
Orlando Metro: Best for Traditional Investors
There are many things that make Orlando one of the best places for traditional investors to invest in Florida. The city is home to many of the country’s top-rated entertainment centers, theme parks, and universities.
The Orlando area is suitable for traditional investors because they can find low-budget to high-net-worth properties. The average home value is $383,026, making it more affordable than other populated cities like Miami.
Because of the steady influx of tourists and a strong job market, it can be an attractive place to purchase investment properties. Over the past three years, Orlando’s job growth was 11%, with nearly 129,000 jobs added to the city’s economy. The city is expected to add 500,000 new jobs within the Orlando metro area within the next decade.
Clearwater: Best for Airbnb Properties
Clearwater, part of the Tampa Bay metro area, is one of the best places to invest in Airbnb properties in Florida. This is because house prices have risen over 31.9% in the past year, forcing many locals to consider renting versus buying a house.
While you have the option to list your investment property as a traditional rental, statistics have shown that Airbnb rentals generate higher monthly rental income. Data from Awning shows investors typically make $2,720 per month off of investment properties in Clearwater. Rental growth has also increased by over 20% in the past quarter.
To further cement itself as a city worth investing in, Clearwater offers a premium location for tourists because of its miles of sugar-while powdery sand and crystal clear water. About five million visitors are drawn to the area each year.
Ft. Lauderdale: Best for Projected Appreciation
With its bustling area and southern charm, Fort Lauderdale is a great place to purchase investment properties. The area is attractive to millennials because of its restaurants, parks, and local attractions. Over the past decade, the city has seen a 43% gain in the age 25-to-44 population.
The Fort Lauderdale area is best for investors looking for appreciation in the properties they purchase. The city has a median home value of $514,908, which has risen over 30.4% in the past year. Buying a home or several properties as investment properties guarantees a return on investment.
And because millennials are moving to the area, the need for rentals has skyrocketed. Data from Awning shows the average daily rate for rentals is $238, with monthly revenue of $3,562.
Many are moving to Florida not just because of its pristine weather and beaches but also because the state does not charge any income tax.
Jacksonville: Best for Investors on a Budget
Investors on a budget should target Jacksonville for their investment property business. The entry price is significantly lower than some cities on this list but also has the potential for solid rents that will drive cash flow.
According to Zillow, the average home costs $308,300 in the Jacksonville area. These low costs are despite a booming housing market, which has seen home values rise over 30.5% over the past year. When the housing market settles, you can expect to see even lower home prices than this.
Jacksonville is also a lucrative place to purchase short-term and long-term rental properties. The area has seen a 24% increase in rental growth this quarter, with only 28% of rentals available full-time. This can make it lucrative if you want to offer long-term rentals to Jacksonville residents.
Tampa: Best for First-time Investors
If you’re a first-time investor, Tampa is one of the best areas worth considering for your property portfolio. The area is historically known for having high growth. This means that the city is lucrative for tourists and also because people want to move there, making it a steady ground for investment properties.
In fact, research shows that Tampa Bay is No. 3 on the list of top cities people are looking to move to. More than 9,000 people entered that area during the first two months of 2022, compared to about 6,000 during that same time one year ago.
The average home value is $415,484, according to Zillow. The area has seen tremendous growth over the past year, with home prices rising over 34%, making it lucrative for first-time investors who can expect to have their properties appreciated over time. Awning also found that rental growth grew around 18% in the past quarter alone.
Orlando Sub Markets: Best for Fix and Flip Investors
While the city of Orlando is best for traditional investors, fix and flip investors will find the Orlando submarkets best for their investments. The Orlando metro area has low average home values compared to other Florida markets, making it a great place to find a bargain.
And because of the steady influx of tourists and projected job growth, your fix and flip investments are likely to be booked year-round. Data from Awning shows that rental growth has increased 9% over this quarter, with occupancy rates at 73%. The average investment property brings in $212 per day or $2,970 per month as of August 2022.
The Orlando submarkets are lucrative for investors because the area is one of the best entertainment hubs in the country. The local attractions draw in millions of people from around the world.
Regions of Tampa: Best for Multifamily Investors
The Tampa region is one of the best areas for multifamily investors in the nation. This is due to several factors, including employment growth, rental growth, vacancy rates, and the construction of new units.
As discussed above, millennials are moving to the Tampa region because of its amenities. This has caused the job market to increase by 2.3% over the past year. Future job growth over the next decade is expected to be 42.7%, showing that the region has no signs of slowing down. Data from Awning shows rental growth has increased 18% this quarter, with occupancy rates at 73% as of August 2022.
As the region grows, more families will look to settle down, opening the door for multifamily investment properties. You can decide to rent short-term or long-term, whichever you prefer. The increase in families will not just lead to more construction and investment opportunities but also higher rents.
If you’re looking to purchase investment properties, there’s no better place to look than the Sunshine State. The Miami area is an excellent option for investors who want to set up short-term and long-term rentals. In contrast, the Orlando area offers many opportunities for traditional investors looking to purchase homes at a low price.